Cost Overruns

AEL Industries Inc. of Lansdale has stepped up its austerity measures and is doing "a lot of belt-tightening" to cope with cost overruns on a defense contract, company president Jesse Reibman said yesterday. Riebman said a regular quarterly internal technical and financial review of contract projects found problems with several defense contract programs. The primary problems were cost overruns and technical troubles in a $5.3 million program for an avionics (aviation electronics) system for an army reconnaissance aircraft.

By Sarah Fulton SPECIAL TO THE MORNING CALL - Freelance | July 5, 2009

North Whitehall officials do not yet know how much the township will have to pay in cost overruns for the Route 309 improvement project, but supervisors last week did not discount talk of hundreds of thousands of dollars. The township and the state are sharing the cost of the project and will also share any cost overruns. The project calls for turn lanes, signaled intersections and other road improvements along Route 309 between Orefield and Schnecksville. The project also includes moving Old Packhouse Road.

An Emmaus R.1 man is seeking payment for cost overruns on a Bethlehem Housing Authority project on which he worked as a masonry subcontractor. Marvin L. Moyer of Main Road West is suing Lanark Construction Inc. of Coopersburg R.3 and Fidelity and Deposit Co. of Maryland, Bala Cynwyd, Montgomery County. Moyer says in the suit, filed in Northampton County Court, that he signed a contract with Lanark to provide labor, materials, equipment and scaffolding for masonry work in the second phase of Lynfield Terrace South, a construction project undertaken by the Bethlehem authority.

A year ago, Northampton County Council was screaming about Executive John Stoffa's failure to get anything done. Council member Charles Dertinger complained, "We have an administration that can't build a birdhouse." Yet this same group last (week) put the brakes on a $16 million bond proposed for a juvenile justice center expansion ($5.5 million), parking deck repairs ($1.5 million) and bridge reconstruction ($1 million). The borrowing plan also refinances around $8 million in existing debt.

AEL Industries Inc. of Lansdale says it expects a $2.9 million loss for the second quarter and a "marginal" profit for the fiscal year because of cost overruns on defense contracts. AEL said that during its in-depth quarterly performance reviews, it found technical and management deficiencies in a contract for avionics, or aviation electronics. AEL said said the contract was awarded "with a number of inadequately defined performance specifications" and those specifications are now the subject of negotiation.

Bethlehem Authority agreed Thursday to pay more than $1.1 million to settle lawsuits filed by two contractors who claimed the city was shortchanging them. In unrelated lawsuits, the authority unanimously agreed to pay J.D. Morrissey of Philadelphia for work it perform on the Penn Forest Dam project, and another $200,000 to Allan A. Myers for the Worcester company's work to install 2.5 miles of water pipe in 1993. Both companies ran into unforeseen cost overruns, and the city disputed whether it was responsible for funding the extra work.

The agency that oversees Lehigh Valley road construction costs approved taking $7.4 million in cost overruns for the Route 222 improvement in Trexlertown from future improvements, including a Route 145 safety project and the Routes 33 and 512 interchange. Amanda Leindecker of the Pennsylvania Department of Transportation's District 5 said Wednesday that crews found more underground utilities that would be affected by the Route 222 work than anticipated. She told members of the Lehigh Valley Transportation Study coordinating committee that there are numerous sewer and water lines in the area and two major pipelines must be relocated.

The state Department of Transportation's "failures and bureaucratic greed" are to blame for cost overruns in the "22 Renew" project, and Lehigh Valley taxpayers should not be held responsible, state Rep. Lisa M. Boscola said Tuesday. Boscola, D-Northampton, held a news conference in her office to criticize PennDOT and its threat to delay six planned highway projects in the Lehigh Valley because the Route 22 overhaul has gone over budget. PennDOT and local officials were to meet today to discuss the situation.

Bethlehem City Council will not have to approve funding for cost overruns at the city landfill, as reported in yesterday's Morning Call. Full council action is required for budget changes, but no budgetary transfers are required for the $130,000 in extra work approved Monday by the Finance Committee, said Public Works Director Wendell Sherman. The Finance Committee approves significant increases in awarded contracts.

The Quakertown General Authority yesterday debated whether or not to accept $5,000 in cost overruns included in the bill from its auditor, Ernst & Young. The authority's 1988 audit is now several months late. The authority's solicitor, William Thatcher, said Ernst & Young the lateness and the cost overruns to its difficulty in reconciling the 1988 audit with the 1987 audit by KPMG Peat, Marwick, Mitchell & Co., another prominent accounting firm. Board members were divided on whether to pay the total bill, which came to $13,559, or hold the accounting firm to its original bid of $7,000 plus out-of-pocket expenses.

Las Vegas Sands is forging ahead with its Bethlehem casino development, in which overruns appear to have pushed the cost past $900 million, even as the company scales back a $12 billion project in Macau, China. Sands executives, during a quarterly earnings call Monday, announced they were on schedule to have a $743 million casino and parking garage complex open in Bethlehem by June, but would have to delay completion of the shopping mall, hotel and events center until money is available to finish them.

By Charles Malinchak Special to The Morning Call - Freelance | July 8, 2008

The cost of trash collection in Perkasie has gone so far over budget that some on Borough Council on Monday night advocated raising the price of garbage bags and looking into contracted trash collection services. Borough residents are required to buy special bags for their garbage that cost $2.75 for a large and $1.75 for a small. The price of each could go up by 50 cents under a proposal endorsed by some council members. The borough is the only community in the county that operates its own sanitation department, which Council Vice President Rich Hendricks said that at the year's midpoint, is already running a deficit of $75,000.

Northampton Area School District will add an extra million dollars to a new $3 million loan for construction projects, officials have decided. The school board unanimously agreed to the move Monday, saying the money would go toward improvements including a new heating and air conditioning system at Lehigh Elementary School. The district already has more than $76 million in bonds, which it's using to finance renovations and expansions at Northampton Area High School, Siegfried Elementary School in Northampton and George Wolf Elementary School in Bath.

Why? The courthouse has leaked since it opened in 1964. Also, the judiciary needs more space. President Judge Alan Black pointed out Monday that there were four judges seated at the courthouse when it opened compared with 10 judges today to handle an increased number of civil and criminal cases. Also, he said, 150 lawyers worked with the court, and homicide trials came up every one to two years, compared with more than 700 lawyers today and 15 to 20 homicide cases a year. How much will it cost?

The Pen Argyl Area Concerned Citizens (PAACC) thanks Northampton County Council for finally getting it right. When council voted to rescind what's left of the economic development bond money for the Slate Belt Industrial Center, often called the Wind Gap bypass, the majority of local residents finally had their voices heard. The fine taxpayers of the county were promised 6,750 feet of industrial road frontage, 1,200 new above-average paying jobs and completed infrastructure by September 2003.

Fifteen new classrooms are to pop up at Northampton's Wolf Elementary in the next six months, but the school's expansions will cost at least $1.3 million more than officials had planned. Northampton Area School Board members learned Monday that contractors' bids on the project came in around $14 million, or about 10 percent higher than designers had estimated. Even though the high bids might push the district deeper into debt, the board voted 8-1 to proceed, sticking to a tight timeline that would see a new wing of prefabricated classrooms open before next school year at one of the district's most crowded buildings.

AEL of Lansdale lost $2.2 million for the first nine months of the current fiscal year after taking a charge for anticipated contract overruns in the second quarter. The loss contrasted to earnings of $1.8 million for the comparable nine months in the previous fiscal year. Cost overruns and technical programs in a $5.3 million Army reconnaissance avionics program resulted in a $2.92 million loss in the second quarter. ' LOGO by UNKNOWN. AEL Industries Inc. logo. The following fields overflowed: STYPE = BUSINESS OUTLOOK SPECIAL

Nesquehoning Borough Authority Chairman Wayne Fritzinger, citing pressure from some councilmen, has resigned. Council accepted the resignation at its meeting last night. Then some councilmen responded to Fritzinger's accusations. "I don't like it when someone gets behind the eight ball then he blames other people because he has to resign," Councilman Frank Jacobs said. Fritzinger blasted some councilmen for advising the authority not to hire Wagner Associates Inc. for a federally-mandated water improvement project.

So much for the new era of cooperation between Lehigh County and Allentown. In a tiff that has exposed strains between Allentown Mayor Ed Pawlowski and County Executive Don Cunningham, Pawlowski on Tuesday denied a county request to use the city's storm sewer video survey equipment to prepare for construction of a minor league baseball stadium on the east side. "The county people wanted us to pick up the cost," Pawlowski said Wednesday. "I said no. We don't have the money to be doing that.

The escalating price tag of Perkasie's new public pool won't translate into higher tax bills -- at least not in 2007 -- borough officials said this week. Council members, who said they've already slashed $400,000 from next year's spending plan, expect to make more budget cuts and borrow more to pay for a pool project that has risen in price from $2.6 million to $3.9 million. The board will meet Monday night to discuss potential budget cuts and figure out how much more debt the borough can take on. "We're not looking at increasing taxes, the electric rate or trash [bag fees]